NEW DELHI: Apple’s iPhone shipments in India last year are estimated to have shrunk by as much as half from the 2017 level, its worst performance since 2014 in the world’s fastest-growing smartphone market, adding to global woes that have forced the company to cut its revenue outlook.

While Hong Kong-based Counterpoint Technology Market Research projected Apple’s India shipments at1.6-1.7 million in 2018, CyberMedia Research pegged them at roughly 2 million — both lower than 3.2 million in 2017. High prices were a drag for Apple, which was unable to compete with rivals including China’s OnePlus, which offer devices with better features at half or even a third of the cost of iPhones, analysts said.

Apple may have shipped about 400,000 iPhones in October-December, according to Neil Shah, research director at Counterpoint Research. In comparison, OnePlus, the leader in the premium segment, shipped an estimated 500,000 units. “Apple had been rising every year until 2017… the 2018 shipments will be at the level of 2014-15, setting them three years back in a market that has grown 50% between 2014-15 and 2018,” he said.

LOSING STEAM IN INDIA

India’s smartphone market almost doubled to 150 million units in 2018 from about 80 million in 2014. Comparatively, Apple’s shipments have risen to 1.6-1.7 million now — a market share of about 1.2% — compared with 1.5 million in 2014, according to Counterpoint.

Analysts said the slump in 2018 can be attributed to intense competition and the $1,000 price tags of the new iPhone models, which failed to attract buyers even after offering EMI schemes, zero down-payment and cashback plans. Some offers on older models such as iPhone 8 and 8 Plus also didn’t work, said analysts.

India added to Apple’s problems across the globe in 2018, specifically slowing economic growth in China, due to which the company lowered its revenue forecast for its fiscal first quarter ended December 29 to $84 billion. In November, it had pegged first-quarter revenue at between $89 billion and $93 billion.

Apple declined to comment to ET’s emailed queries.

INDIA BUSINESS

Apple’s India business grew from $100-200 million a few years ago to over $2 billion in 2016 and flattened out after that, Apple CEO Tim Cook said in an interview to CNBC last week.

Apple still considers India an important market and has “more work to do,” Cook said in the interview, adding that it wants to get better results in the future. The Cupertino-based company wants to open its own stores in India and would like duties on its products to be cut.

“For Apple, 2018 has been a disastrous year in India… while Apple is still the favoured aspirational brand in India, it has definitely slipped. In comparison, the Android smartphone market in India is one that is thriving and full of innovation,” said Prabhu Ram, head-industry intelligence group at Cyber-Media Research.

CMR anticipates an almost 45% decline on year in iPhone shipments in Q4 2018 and shipments of 2 million units for the full calendar year.

STICKINESS FACTOR

Counterpoint’s Shah said the stickiness factor for iPhones is reducing fast because phones have become a commodity.

“Chinese brands have 30-40% cheaper pricing than Apple. It doesn’t make sense to pay sky-high prices for a product that doesn’t have new features,” he said, adding that iPhones won’t even support 5G until 2020.

The prices of iPhones are shrinking its potential base, even among existing users who are due to replace their devices, according to techARC analyst Faisal Kawoosa.

Media reports said Apple may assemble its top-end iPhones in India through the local unit of Foxconn Technology Co. this year, a move that could result in cost savings that can be passed on to consumers.

“Local manufacturing won’t move the needle much since Indian consumers are happy with offerings by OnePlus,” Shah said, adding that Apple doesn’t want to lose brand equity in India and may not slash prices.